There are really two questions here--
1. Investing in stocks assuming the present modified pay-as-you-go system is continued. If so, the effect of a better return thru private securities would be of relatively minor importance. One should keep in mind that the present reserves are almost entirely intended to provide for the extra cost of the extra large baby boomer generation. Once that generation retires and begins to draw down that reserve to a very small amount, the effect of any improved return from private securities would be negligible under a pay-as-you go system.
2. Investing in stocks and other private securities under a personal account system. To me, it seems almost inevi table that such an option should and would be offered to the account holders. But the key point is that switching to such a system should not even be considered until some workable scheme is devised to deal with the six trillion dollar unfunded accrued liability of Social Security. Presently, current OASDI taxes are used to pay current benefits, to retirees, survivors, and disabled persons. If instead those taxes are placed in personal accounts, then no money is available, except for the present tiny Trust Fund, to pay those benefits. To suggest a personal account system without dealing with this question is irresponsible and immoral.
